Accounting Grade 11 P2 Gauteng November 2020 QP (Eng)

Downloaded from hlayiso.com GAUTENG DEPARTMENT OF EDUCATION PROVINCIAL EXAMINATION NOVEMBER 2020 GRADE 11 ACCOUNTING PAPER 2 TIME: 2 hours MARKS: 150 14 pages + 1 formula sheet P.T.O.

Downloaded from hlayiso.com ACCOUNTING 2 PAPER 2 GRADE 11 INSTRUCTIONS AND INFORMATION Read the following instructions carefully and follow them precisely. 1. Answer ALL the questions. 2. A special ANSWER BOOK is provided in which to answer ALL the questions. 3. A FORMULA SHEET for financial indicators is provided at the back of this question paper. 4. Show ALL workings to earn part-marks. 5. You may use a non-programmable calculator. 6. You may use black or blue ink to answer the questions. 7. Where applicable, show all calculations to ONE decimal point. 8. Write neatly and legibly. 9. Use the information in the table below as a guide when answering the question paper. Try NOT to deviate from it. QUESTION TOPIC MARKS TIME IN MINUTES 1 Reconciliation 40 32 minutes 2 Manufacturing 55 44 minutes 3 Inventory valuations & Ethics 20 16 minutes 4 Budgets 35 28 minutes TOTAL 150 120 minutes P.T.O.

Downloaded from hlayiso.com ACCOUNTING 3 PAPER 2 GRADE 11 QUESTION 1: RECONCILIATION (40 MARKS: 32 MINUTES) 1.1 Indicate whether the following statements are TRUE or FALSE. Write only the answer “true” or “false” next to the question number (1.1.1 to 1.1.5) in your ANSWER BOOK. 1.1.1 An original invoice is the document received by a customer who has purchased goods on credit. 1.1.2 A post-dated cheque issued to a creditor would not be entered in any journal until the date stated on the cheque. 1.1.3 A creditor will not issue a receipt to a debtor who pays her account by electronic transfer. 1.1.4 A debit note is issued to a creditor explaining to him why the goods are being returned. 1.1.5 A creditor is a non-current liability. (5 x 1) (5) 1.2 BANK RECONCILIATION The information relates to Vintage Traders. Required: 1.2.1 Show changes in the cash journals for 30 November 2020. (08) 1.2.2 Calculate the correct Bank Account balance on 30 November 2020. (5) 1.2.3 Prepare the Bank Reconciliation Statement on 30 November 2020. (7) 1.2.4 The owner, J Kirk, realised that many people are now using electronic funds transfers (EFTs) to pay the business. State TWO advantages of EFTs. (2) P.T.O.

Downloaded from hlayiso.com ACCOUNTING 4 PAPER 2 GRADE 11 INFORMATION: A Extract: Bank Reconciliation Statement on 31 October 2020 Debit balance as per Bank Statement R 8220 Outstanding deposits R16 300 Outstanding cheques No. Date 642 10 May 2020 R2 300 854 14 October 2020 R1 250 888 27 October 2020 R5 780 1032 28 October 2020 R7 950 Unfavourable balance on Bank Account R ???? B Additional information relating to the above Bank Reconciliation Statement for October with the Bank Statement for November:  The outstanding deposit appeared on the November Bank Statement.  Cheque 642 was issued as a donation to a local charity. It was never deposited.  Cheque 854 did not appear on the November Bank Statement. It was lost, a new cheque will NOT be issued.  Cheque 888 did not appear on the November Bank Statement.  Cheque 1032 appeared on the November Bank Statement with the correct amount of R5 250. C Provisional totals in the Cash Journals on 30 November 2020 before receiving the Bank statement: Cash Receipts Journal: R54 940 Cash Payments Journal: R64 800 P.T.O.

Downloaded from hlayiso.com ACCOUNTING 5 PAPER 2 GRADE 11 D Entries on the November 2020 Bank Statement that do NOT appear in the Cash Journals: DATE DETAILS R 15 Debit order: Outsurance 8 950 Debit order: Outsurance 8 950 NOTE: Insurance appeared twice in error. This will be rectified next month by the bank. 16 Unpaid cheque R3 800 by the debtor, N Pay in settlement of his debt of R4 000. 25 An EFT by a tenant for rent income. 16 500 30 Interest on a Cr balance. 750 30 Credit card levies. 980 E Entries in the Cash Journals NOT in the November Bank Statement:  Deposit, R19 765  EFT 14 to a creditor for the 30 November, R8 630  Cheque 1044, R5 900 F Bank Statement balance on 30 November 2020 …? 1.3 CREDITORS’ RECONCILIATION A statement of account received from Golden Globe Traders on 25 September 2020 reflects that Emmy Stores owes them R26 228. The Creditors’ Ledger in the books of Emmy Stores reflects an outstanding balance of R28 656. REQUIRED: 1.3.1 Use the table provided in your ANSWER BOOK to indicate the changes to the:  Creditors’ Ledger in the books of Emmy Stores.  Creditors’ Reconciliation Statement on 30 September 2020 Indicate an increase or decrease with a + or – where applicable. (9) P.T.O.

Downloaded from hlayiso.com ACCOUNTING 6 PAPER 2 GRADE 11 1.3.2 An internal audit of Emmy Stores discovered that goods to the value of R6 500 ordered from PK Stores were not delivered to the premises of the business. An investigation revealed that the person in charge of placing the orders and receiving goods, ordered the goods for his personal use. (a) What action should be taken by the management against this employee? Provide TWO points. (2) (b) Provide TWO internal control measures that should be applied to prevent this from happening. (2) INFORMATION A Creditors’ Ledger of Emmy Stores Date Details Debit Credit Balance 2020 1 Account rendered 22 145 Sept 3 Invoice 223 5 404 27 549 5 Debit note 96 309 27 240 12 Cheque 181 10 554 16 686 Discount 1 766 14 920 15 Invoice 105 3 464 18 384 23 Invoice 229 3 594 21 978 24 Invoice 284 (after 4 415 26 393 trade discount) 30 Invoice 302 2 263 28 656 P.T.O.

Downloaded from hlayiso.com ACCOUNTING 7 PAPER 2 GRADE 11 B Statement of account received from Golden Globe Traders GOLDEN GLOBE TRADERS STATEMENT OF ACCOUNT 18 Snake Road Tel: 032 705 0961 Mlalazi Fax: 011 412 5431 1511 25 September 2020 ACCOUNT OF: EMMY STORES ACCOUNT NO. ABC 543 Date Details Debit Credit Balance 2020 1 Balance 22 145 Sept 3 Invoice 223 5 660 27 805 5 Credit note 109 309 28 114 12 Receipt 5140 10 554 17 560 23 Invoice 229 3 594 21 154 24 Invoice 284 4 905 26 059 25 Interest on overdue account 169 26 228 C Additional information The following errors and omissions were noted: 1 Invoice 223 on 3 September 2020 was correct according to the statement received from Golden Globe Traders. 2 Golden Globe Traders made an error in recording the return of goods on 5 September 2020. 3 Emmy Stores qualified for an early settlement discount with the payment of 12 September 2020. Golden Globe Traders granted R1 766 as discount. They promised to show this on their statement next month. 4 Invoice 105 for R3 464 was recorded incorrectly in the Creditors’ Ledger of Golden Globe Traders. The purchase was made from ABA Suppliers. 5 A trade discount was deducted on invoice 284. Golden Globe Traders did not take this into account. Golden Globe Traders will correct this error next month. 6 Invoice 302 did not appear on the statement received from Golden Globe Traders as this transaction took place after their statement date. 7 Golden Globe Traders have correctly charged interest of R169 on the account. P.T.O.

Downloaded from hlayiso.com ACCOUNTING 8 PAPER 2 GRADE 11 QUESTION 2: MANUFACTURING (55 MARKS: 44 MINUTES) This question consists of TWO independent questions. 2.1 HAPPY PAWS PET FOOD REQUIRED: 2.1.1 Calculate the amount of raw materials issued for production in 2020. (6) 2.1.2 Calculate the direct labour cost. (12) 2.1.3 Prepare the following accounts in the General Ledger: (a) Factory Overheads Cost (14) (b) Work-in-Process stock (9) NOTE: Balance/Close off the accounts properly on 30 September 2020. INFORMATION: A The following balances appeared in the books of Happy Paws Pet food: 30 September 1 October 2020 2019 Direct/Raw material stock 20 000 48 000 Work-in-progress stock 75 000 35 000 Indirect material stock 7 500 7 200 P.T.O.

Downloaded from hlayiso.com ACCOUNTING 9 PAPER 2 GRADE 11 B Transactions for the year: Raw materials purchased during the year 650 000 Carriage on raw materials purchased 12 300 Factory rent paid 68 400 Advertising paid 23 500 Factory maintenance paid 46 700 Water and electricity paid 75 000 Indirect material purchased 56 000 Sundry expenses paid 21 000 Factory foreman’s salary 135 850 Office assistant’s salary for the year 130 000 C Additional information: i Production wages: Number of employees 9 Normal time hours worked per employee 1 240 hours Overtime hours worked per employee 365 hours Normal time rate R45,00 Overtime rate 2 times the normal rate Deductions and Contributions (calculated on basic salary) Employee Employer Pension Fund 4% 5% UIF 1% 1% ii Included in the amount for raw materials are goods that were not ordered therefore it was returned to the suppliers, R35 000. iii Water and electricity and rent are to be split between the three departments according to floors:  Factory 800 square meters.  Office 180 square meters.  Sales department 220 square meters. iv Depreciation for the year:  Office equipment, R9 500  Factory machinery, R12 800 P.T.O.

Downloaded from hlayiso.com ACCOUNTING 10 PAPER 2 GRADE 11 v Sundry expenses must be allocated in the ratio 4 : 2 : 1, for the factory, office and sales departments respectively. vi 40 300 units were produced during the year at a cost of R44,70 per unit. vii Some of the completed pet food was donated to the SPCA. This donation was taken directly from the factory and delivered to the SPCA. 2.2 MUFASA MANUFACTURERS Mufasa Manufacturers manufacture plastic stationery bags. The information below was taken from their accounting records for the financial year ended 30 June 2020. REQUIRED: 2.2.1 Calculate the amounts indicated by (a) and (b). (4) 2.2.2 Calculate the break-even point for the financial year ended 30 June 2020. (7) 2.2.3 Do you think the business should be happy with the break-even point? Quote relevant figures to justify your comment. (3) INFORMATION 30 June 2020 2019 Total Unit cost Unit cost cost Fixed costs 1 248 000 50,00 47,00 Factory overhead costs 898 560 36,00 34,00 Administration costs (a) 14,00 13,00 Variable costs 3 294 720 ? 126,00 Direct labour costs 1 397 760 56,00 51,00 Direct material costs 748 800 (b) 50,00 Selling and distribution costs 1 148 160 46,00 25,00 Number of units produced and sold 24 960 23 600 Selling price per unit R184 R220 Break-even number of units. ? 11 800 P.T.O.

Downloaded from hlayiso.com ACCOUNTING 11 PAPER 2 GRADE 11 QUESTION 3: INVENTORY VALUATION AND ETHICS (20 MARKS: 16 MINUTES) 3.1 INVENTORY SYSTEMS Kayley’s Sweets is owned by Kayley Louw. The business uses the Periodic Inventory System. The financial year ends on 29 February 2020. REQUIRED: 3.1.1 Calculate the purchases figure that will be closed off to the Trading Account. (4) 3.1.2 Calculate the sales figure that will be closed off to the Trading Account. (4) 3.1.3 Calculate the cost of sales. (4) INFORMATION: A Extract from Pre-adjustment Trial Balance on 29 February 2020 Debit Credit Balance sheet account section Trading stock (1 March 2019) 75 000 Nominal account section Sales 350 000 Purchases 230 000 Carriage on purchases 17 500 Debtors’ allowances 25 000 B No entries have been made for the following: i An invoice totalling R3 250 for stock purchased on credit from Pam Traders. ii Goods costing R12 500 returned to suppliers before stocktaking. iii The owner Kayley Louw took goods costing R1 250 for personal use. iv A debtor returned goods sold to him for R11 250. The cost price of the goods was R7 500. These goods were transferred to stock before stocktaking took place. v Physical stock count on 29 February 2020 revealed R90 000 stock on hand. P.T.O.

Downloaded from hlayiso.com ACCOUNTING 12 PAPER 2 GRADE 11 3.2 INTERNAL CONTROL OF ASSETS REQUIRED: Answer the questions below related to the case study. INFORMATION: Catharine Janeway owns a business separated into two departments. In the one department she owns storage units which she rents out to clients to store their goods. In the other division she owns delivery vehicles used to transport the goods to and from her storage units. She has some concerns regarding her business and has approached you for assistance. 3.2.1 Catharine is aware that most assets lose value due to normal wear and tear. Which fixed asset does not normally depreciate at the end of the financial year? Explain why. (2) 3.2.2 Briefly explain to her the purpose of the fixed asset register. (2) 3.2.3 Catharine received some complaints from her clients that stock has gone missing from their storage units. Give ONE suggestion to solve this problem. (2) 3.2.4 The business has three delivery trucks, each with its own driver. Catharine has discovered that one of the truck’s kilometre readings is higher than what it should be. Give ONE practical solution how she can solve this issue. (2) P.T.O.

Downloaded from hlayiso.com ACCOUNTING 13 PAPER 2 GRADE 11 QUESTION 4: BUDGETS (35 MARKS: 28 MINUTES) This question consists of TWO independent questions. 4.1 MATCHING ITEMS Choose the answer from COLUMN B that matches the question in COLUMN A. Write only the letter (A – F) next to the question number (4.1.1 to 4.1.5) in the ANSWER BOOK. COLUMN A COLUMN B 4.1.1 What is the main purpose of A Provision for bad debts preparing the Cash Budget? adjustment and discount allowed. 4.1.2 Name TWO items that will appear in the Cash Budget, B The selling price for a but not in the projected vehicle sold and the profit Income Statement. made from the sale. 4.1.3 Name TWO items that will C Estimated projected figures appear in a Projected Income for the future. Statement, but not in the Cash Budget. D It is an imputed expense. 4.1.4 Explain ONE similarity E To project future receipts between a Cash Budget and and payments. a projected Income Statement. F Purchase of assets and payments to creditors. 4.1.5 Why is depreciation not included in the Cash Budget? (1 x 5) (5) 4.2 CASH BUDGET The information below relates to Mosa Stores REQUIRED: 4.2.1 Complete the Debtors’ Collection Schedule for September and October 2020. (10) 4.2.2 Complete the Cash Budget for September and October 2020. (20) P.T.O.

Downloaded from hlayiso.com INFORMATION A Collection of debt is according to the following pattern:  30% of debtors settle their accounts during the transaction month of sale to receive 5% discount for prompt payment.  40% of debtors settle their accounts in the month following the transaction month.  25% of debtors settle their accounts in the second month after the transaction month.  5% of debt is written off as irrecoverable during the third month. B Summary of transactions: Details July August September October Cash Sales 200 000 250 000 240 000 230 000 Credit purchases 70 000 80 000 65 000 85 000 Rent income 12 000 12 000 15 000 15 000 Salaries 75 000 75 000 75 000 ?  Cash sales are 25% of the total sales.  Credit purchases are 50% of the total purchases. C Creditors are paid one month after purchases. D The following withdrawals are made monthly by the owner:  Cash to pay his son’s school fees, R7 500  Trading stock, R2 800 E Advertising is calculated at 1% of the previous months total sales. F All employees will receive a salary increase of 6% at the end of October. TOTAL: 150 END

Downloaded from hlayiso.com ANNEXURE FORMULA SHEET Gross profit 100 Gross profit 100 Net profit 100 x x x Sales 1 Cost of Sales 1 Sales 1 Operating Expenses 100 Operating Profit 100 x x Sales 1 Sales 1 Total Earnings by Partner 100 Net Profit 100 x x Average Partners' Equity 1 Average Partners' Equity 1 Current Assets: Current Liabilities Current Assets – Inventories: Current Liabilities Average Debtors 365 12 Average Creditors 365 12 x or x or Credit Sales 1 1 Credit Purchases or Cost of Sales 1 1 Average Inventorie s 365 12 Cost of Sales x or Cost of Sales 1 1 Average Inventorie s Non Current Liabilities: Partners’ Equity Total Assets: Total Liabilities